Where do property rights come from?

Phil wrote some interesting thoughts in his blog about property rights, and the everyman's rights we have in Finland.

Because economic resources can't be cut off from other areas of sociality in any reasonable way and because we all require economic resources in order to satisfy our individual preferences, property rights and the economy are very serious issues to libertarians. In the rationalist humanist tradition (which very closely ties in with the classical liberal tradition), most libertarians are also used to rational thinking and deductive arguments (even if we sometimes are as stubborn as anyone to admit we're wrong).

Thus, instead of lapsing into "majoritarian relativism" and finding the basis for good law in "whatever the democratic state produces" (without often even understanding the dynamics of the procedure in question), libertarians have strong opinions on how property and economic rights should be set.

Because of the overaching coherence of all exact social science theories on social, economic and political problems, it soons comes clear to not only libertarians, but to apolitical studiers of social and political phenomena as well, that private property is by far the most viable solution to the multitude of the most basic incentive, information and organization problems living with other people brings about.

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Now, some libertarians, such as Phil, often take private property as axiomatic, ie. as the basis and beginning point of political philosophy, instead of something that should be argued for. This type of moral philosophy is often (partly mistakenly) branded the name natural law.

Robert Nozick, in his classic book Anarchy, state and utopia, goes for a philosophy of the same sort: he presupposes property rights and shows what the society would look like in that case. As such, the book is a beautiful display of the societal implications of strict private property and a stunning example of the possibilities such a framework gives people to enjoy and live their individual liberties.

Now, many or even most people dissent this view because it doesn't "justify" private property in any way, but takes it as an axiom. They belive such critique is enough to dismiss natural rights as poppycock.

However, these "most people" have apparently never understood even the basics of moral philosophy. Because of Hume's guillotine and the regress argument, you need to start at some axioms, no matter how arbitrary.

And, indeed, if one hasn't ever realized that their own political thought must be rooted in at least some purely arbitrary axioms that are purely pulled from the sleeve and have no justification whatsoever for themselves but are presupposed, then one's views are most certainly purely irrational and can provide no justified basis for either politics or social behavior. This fact comes from purely naturalistic scientific views and reflects the way the world is; and there's not much arguing against that.

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Now, when anyone looks at the objective facts that the scientific social sciences tell us about complex political and social phenomena, rarely can you argue the axiom of private property isn't well justified indeed. As an over-simplification of one of the most important institutions of modern society, the axiomatic conception of private property sucks a whole lot less than any other popular conception of economic organization, not to mention the fuzzy relativistic populist realpolitics that produces a lot of the legislation in social democratic countries such as Finland.

The basic opposition the commentators in Phil's blog produced to his ideas seemed to follow exactly that path; basic atavistic conservative opposition to the destruction of a deeply culturally rooted institution ("everyman's rights") familiar to everyone. I didn't see any arguments against Phil that understood the underlying social problems in any way. Some went as far in their deeply intellectual critique of Phil to ask whether he perhaps possessed the views he did because he hadn't tasted the sweet berries that inhabit finnish forests - what the fuck? Others decided to argue a priori that forest owners are often rich and berry-pickers poor, so this is a neat distrubutional trick to feed the poor. And then, one reader pointed to Ronald Coase in a semi-intellectual way, only to imply as if he was the magical bullet to property rights. (All and all, the commentary showcased the explanatory power of Lawrence Kohlberg's developmental psychology of ethics. Before people develope to the mature third stage of moral thinking where they can utilize abstract reasoning to come up with universal ethical principles. Instead these people are hung up on the conventional way of thinking, we're "what's right" is simply obeying the laws and pleasing other people - even if the laws are fascist and the prevailing culture is nazist.)

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So, what exactly are the interpersonal coordination problems and the problems I have dubbed "the most basic incentive, information and organizationary problems of modern society"? If we don't take private property as axiomatic but wish to explain closer where property comes from and where it should be applied (if not everywhere and strictly), the issue boils down to scarcity.

Why is berry-picking in forests allowed for free, but picking candy bars from supermarkets for free isn't? Because the candy bars are scarce, so property rights have to be imposed and the shopkeeper must be allowed the right to exclude anyone from using or taking the candy bars.

However, if a landowner feels a subjective loss when the berries are picked from her forest (perhaps because she wants to pick them herself), she can, actually, according to Finnish law, fence her property, whence the everyman's rights cease to exist on that given property. Berry-pickers aren't allowed to climb over the fence.

We can't apply Coasean theory here, because the transaction costs are too high and the possible technology to help berry-pickers and landowners meet would be too high. We can't governmentally mandate on specific prices for berry-pickers to pay to landowners because of the economic calculation problem, the costs of upholding such laws and again, because of the high transaction costs of directing the compensatory payments to the correct landowners). We also know from the current market emergence that such economic action would probably be infeasible, because in countries with stricter private property mandations such business hasn't much flourished - I could be wrong though, but has anyone ever heard of forest-owners selling permits to go and pick berries in their forests? (Might actually be, and I can't rule this, Phil's idea, out altogether).

This is not only a very low transaction cost way of informing passers-by that berry-picking is forbidden on the premises, it also imposes costs on the landowner that force her to reveal if her preferences are indeed higher than the fence-building costs (the costs of the most effective way of upholding the property rights). (If these costs would be socialized, it would indeed prima facie create perverse incentives for landowners to prohibit berry-picking even if they themselves wouldn't do anything with berries and picking them from their forest would be a paretian improvement. Not to mention the fact that the finnish police force would be required to have a "forest police" section, which would cost a lot more than building fences.)

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So, if I don't believe in natural rights, what do I believe in? That person-neutral consequences and preferences as taken should matter.

Thus, I believe that fully-excludable private property on most economic resources is the best possible solution, whereas economic land's property rights are more of a bundle-of-rights that aren't often universally excludable (even if you own the forest, someone can pick the berries - I believe in everyman's rights) except if you take the legal upholding costs as your own burden (fence your forest if you don't want your berries picked).

This same framework of utilitarian scarcity arguments extends to patents and intellectual property as well, where the implied unscarcity of the works themselves makes some people think intellectual property rights shouldn't exist at all, when they should be focusing on the scarcity of the work required to produce the media. Thus, both intellectual property and patent law should define property rights on original work and work with big effort, to last for some time (a short time, but not for a lifetime). (On that account, the finnish green's All rights reserved -pamphlet as well as MP Jyrki Kasvi's statements are interestingly smart.)